CONCERNS have been raised that the so-called "poverty premium" is costing poorer Mid Devon households more than £7 million per year.

The concept relates to lower income households paying higher rates than more affluent households to access the same services.

A report by Mid Devon District Council said experts predict that nearly a quarter (23 per cent) of households in the Tiverton and Honiton constituency, and 20 per cent in the Central Devon constituency, are being penalised – costing residents a total of £7.2 million a year.

A prime example relates to pre-payment energy meters, which were historically more expensive than being on a contract. A government scheme means the disparity is small-to-negligible now. However, the subsidy that makes this possible is due to end in March.

Three energy firms – EDF, Octopus, and Scottish Power – have been given permission by the energy regulator Ofgem to forcibly fit pre-payment meters if they meet new strict rules, ending a ban on such a practice after their previous effect on vulnerable customers.

Councillor James Buczkowski (Liberal Democrat, Cullompton St Andrew's) proposed a motion that Mid Devon write to the government demanding “urgent action to tackle all forms of poverty premium, including those imposed by energy suppliers, insurers, credit sources, banks and other bodies”.

The motion, which was passed, also proposed creating a local vulnerable citizens’ strategy, which could include making sure people on low incomes don’t pay more for their essential services and products.

Cllr Buczkowski suggested the council could work with other local agencies, community groups and charities to promote the take-up of benefits and grants, and work with social and private landlords to make sure their tenants are automatically on the cheapest energy tariff for their needs.

He added that the council should endorse a scheme called "Fair By Design", which provides ways to tackle the poverty premium.

Bradley Gerrard

LDRS